The Bayonne School District is imposing a corrective action plan to deal with alleged misreporting of income by seven employees of the school district.

A report issued by the state comptroller’s office said that the employees underreported their income in applications to the National School Lunch Program, allowing their children to qualify.

Five employees of the Union City school district also allegedly misreported incomes in order to qualify.

The report issued last week cited 15 towns statewide where employees of districts, as well as citizens, allegedly put wrong information on applications.

Bayonne School Administrator Leo Smith said this is an investigation that started back in 2010, and that the district, once notified that there was a problem, changed its operations.

The National School Lunch Program (NSLP) is a federally subsidized meal program designed to assist low-income families by providing low-cost or free lunches to eligible school children. Nationally the program feeds about 31 million children daily, and provides a free or reduced- priced lunch at a cost to the government of about $11 billion. The program is administered at the federal level by the U.S. Department of Agriculture and at the state level by the New Jersey Department of Agriculture. During the 2011-2012 school year, the federal government provided $212 million in NSLP reimbursements to school districts in New Jersey, and the state of New Jersey paid an additional $5.5 million to support it.

Under the program, each local education district, not-for-profit school is responsible for handling the application. A parent or guardian is required to report total gross income each household member receives. Local schools are responsible for reviewing the application and verifying the information. But under federal law, the district is required to verify only 3 percent of applications.

Started investigation

The office of the state comptroller started an investigation statewide after discovering fraudulent applications submitted by public officials in the Elizabeth school district where the children of school board members and others were receiving free lunches but did not qualify.

The investigation concluded that 15 districts, including Bayonne and Union City, had fraudulent information in their school lunch program. Seven people from Bayonne, including public employees and five from Union City, were among the 101 names referred to the Division of Criminal Justice for prosecution, according to the report.

Currently, neither school district knows the names of those who the state claims allegedly gave false information.

Subpoenas issued to district

Smith said that since the investigation was launched, the state has requested information on at least three occasions, issuing subpoenas for records of 105 people initially and later came back for more information about some of these. The last request sought more information for about 40 on the original list.

This included board members and families as well as school staff and city employees.

According to the state report, of 105 applications reviewed in Bayonne from the 2010-2011 school year, 71 did not contain the information needed to properly verify the application. But the report went on to note that Bayonne, in response to a draft report, has since rectified the situation.

Smith said some of the changes included a checklist for verification that has become a model for the state.

Investigators first contacted the Bayonne School District in February 2012 asking for information. The investigation culminated in the July 17, 2013 report.

The report does not name anyone specifically and notes that the matter will be referred to legal authorities for possible action.

“Everything they citied us for is what the USDA asked us to do,” Smith said. “We followed the process the USDA asked us, and apparently the state doesn’t like that process.”

Smith, however, said that following the notice of a possible violation, the district changed its verification process starting in the 2011-2012 school year.

‘Zero tolerance’ in Union City

Union City Spokesperson Joe Lauro said the report was something of a surprise, in that it lacked specific details.

“Basically, we only know what is issued in the release,” Lauro said. “The school district has zero tolerance for this kind of fraud; once we have direction from the state we will adopt whatever policy they recommend to eliminate this activity.”

Lauro said Union City hasn’t been informed of the details, and unlike Elizabeth, where the investigation originated, there isn’t a clear idea of what has transpired that would allow the school district to take action.

Could be a mistake

Bayonne school officials also noted that some of this could be due to error, noting that in the past those filling out the lunch forms simply stated their incomes, and that the USDA verification process did not call for verification of every application.

Smith said generally in the past, applications that showed an income within $100 of the salary guidelines for free or reduced lunches were reviewed.

For the 2011-2012 school year, a family of four could not have an annual income that exceeded $29,055 for free meals or $41,348 for reduced-cost lunch.

In Bayonne, the verification process is done by the school principal in each of the 11 elementary schools and by the six vice principals at the high school, in September when teachers and administrators are inundated with reams of other chores and reports.

Of 8,000 applications reviewed annually in Bayonne, about 6,000 students get free or reduced-cost lunches.

“For us to have seven fall through the cracks because of documents doesn’t seem like a lot,” Smith said. “If someone lied to get a free lunch, then they should be punished. But we’re talking about $2.50 a day. Some of these people could lose their jobs, their pension, and their good name for so little.”

At this point, the district has yet to be informed as to who, the state said, gave misinformation.

“If the state identifies them then the board may take action,” Smith said. “We have a meeting coming up and I’m certain this will be discussed in closed session.”